One step back: IBC must not encourage out-of-court settlements

The central issue is: How can efficient and equitable price discovery be enabled for a stressed asset?

A high-level panel set up to review the functioning of the new Insolvency and Bankruptcy Code (IBC) has submitted a report that is now in the public domain. The panel is part of the government’s continuing and welcome efforts to fine-tune the operation of the IBC. Restoring stressed assets to health in a manner that balances the varied needs and rights of creditors — owners, stakeholders such as workers, and the broader economy — is an overdue task, and so the government deserves credit for constantly seeking to improve on the performance of the IBC. The central issue is: How